The Reserve Bank of Australia (RBA) has announced that it will not be focusing on developing a retail Central Bank Digital Currency (CBDC) in the near future. Instead, the RBA will be concentrating its efforts on the launch of a wholesale CBDC.
During a speech at the Intersekt Fintech Conference in Melbourne on September 18, RBA Assistant Governor Brad Jones unveiled the central bank’s three-year roadmap, which primarily emphasizes the development of a wholesale CBDC.
“I can confirm that the RBA is making a strategic commitment to prioritize its work agenda on wholesale digital money and infrastructure – including wholesale CBDC – rather than retail CBDC.”
According to Jones, research conducted by the RBA indicated that a retail CBDC did not offer significant innovation for public use in Australia. On the other hand, a wholesale CBDC would provide various advantages to commercial and central banks.
These advantages include reducing risks, enhancing transparency, increasing liquidity, and decreasing costs.
Brad Jones at the Intersekt Fintech Conference. Source: Cointelegraph
Jones also pointed out that a retail CBDC in Australia could result in higher borrowing costs, increased bank run risks, and challenges in implementing monetary policy effectively.
The RBA’s “most immediate priority” is to launch the public phase of Project Acacia, which focuses on exploring the wholesale CBDC and tokenized commercial bank deposits.
Project Acacia aims to further research and explore cross-border applications with regional central banks.
Additionally, the RBA plans to establish CBDC advisory forums, support financial innovation reforms, and engage with the public on a retail CBDC.
RBA wholesale CBDC roadmap. Source: RBA
Jones also mentioned that the RBA is conducting further research on asset tokenization and the role of blockchain and smart contract technology in the central bank’s operations.
“The programmability of tokens via smart contracts, and the ability to reduce counterparty risk by exchanging money and assets on the same ledger have been of interest in experimental research.”
According to the Atlantic Council, 134 countries, representing 98% of global GDP, are exploring central bank digital currencies. Of these, 66 countries are in the advanced phase of exploration, development, pilot, or launch.
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